a recent Ficci-E&Y report, multiple pointers indicate serious gaps between the output of skill development institutions and industry requirements. Of around 0.4 million engineering graduates every year in India, only 20% are readily employable.
“By 2020, the country is expected to face shortage of 13 million medium skilled workers, posing a big impediment to labour intensive sectors. The five sectors that are expected to create a majority of jobs are infrastructure, auto, building and construction, textiles and transportation,” the report says.
NSDC's CEO and MD Dilip Chenoy attributes this state of affairs to companies not paying the refund fees to training agencies after the placements take place. Usually, the training agencies get one-month salary from the company which hires the skilled person.
“The industry pays a fee to the training organisation to incentivise it. Many times this fee is not paid and though it does not lead to a decline in the number of people coming to us to get skilled, they are discouraged,” Chenoy said.
In fact, NSDC-funded partners have been working on innovative models of payment, such as 10–20% of the fees being paid up front, with the rest either paid in installments/on placement with a corporate. In some cases, part of the fees is recovered from the employers as a placement fee. In another initiative, a vocational loan product was developed with banks. This allows the trainee to avail of an unsecured loan for as low as $90.
Garment manufacturer and exporter Cotton Blossom has 1,400 employees of which more than 800 have been hired through the skills network since 2010.
“We approach these two agencies for skilled people and after a year, they get paid anywhere between Rs 7,000-10,000 depending on the skills. We have hired a lot from our skilling partners as they get positive feedback from the villages from where they mobilise skilled workers,” added Kumar.